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CHAPTER FIVE

Pitch to investors
Pitching to investors can feel intimidating, but it doesn’t have to be
such a scary thing. Hustle Fund GPs Eric, Elizabeth, and Shiyan have
seen over 50,000 pitches from startup founders throughout their
careers. So they know what makes a pitch great.

We’ll walk you through how the whole process works and share
some advice you might not expect.

How to run your rst meeting

with a VC

Meet on Zoom
It might seem weird to pitch over Zoom. But this is how Hustle Fund
conducts all our pitch meetings. We love this medium because it
allows both parties to see one another in their natural elements.

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When founders meet with Eric on Zoom, they see him in his garage
with his kids’ bikes, BBQ, and trash cans in the background. Eric
shows his real background because it shows what his life actually
looks like. Vulnerability is often reciprocated and that’s where you
can both start to form a more personal connection.

Zoom tip: Set your camera to be at eye level to

make the meeting feel more conversational.

Don’t use a pitch deck

Yes, you read that correctly. It’s totally ok to not use a slide deck
during your rst meeting. I know you spent weeks crafting your pitch
deck, but hear us out.

When you use a slide deck, you automatically enter “presenter

mode”, which gives the meeting a clear power dynamic. Both parties
become uncomfortably aware that one of you is the decision maker
(hint: it’s not you).

When you have a relaxed conversation with someone, the power

dynamic feels more balanced. And when the dynamic is balanced,
you can connect more deeply as humans. By the way, you can still
pitch yourself and your company without using a pitch deck.

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After the initial small talk, ask the investor to tell you a bit about
themselves:

● How they got into venture

● What their role at their rm is
● A deal the fund recently completed

After they share their story, you can tailor your pitch to the VC’s
context.

Great storytelling is great listening

Having a normal conversation rather than a formal presentation
gives you an opportunity to listen to what excites the investor. If they
mentioned

● How they believe in startups who think slowly and long term,
you can tailor your pitch to show how you're thinking long-term
for your startup
● How they started their women-focused VC fund to even the
playing eld, you can emphasize the women and diversity on
your team
● How they invested in a similar company, you can weave how
that company has inspired your journey (if this is true) and how
you have a similar vision as them

These are good ways to connect with the investor and nd some
common ground. As you share more about your similarities, notice

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their reactions on Zoom. If the other person is looking away or

fading off, change the subject to what they care about. If they're
nodding and smiling, those are cues to lean more into your story.

Questions that early-stage VCs

may ask you
Elizabeth has a list of questions that she regularly asks early-stage
founders to decide whether or not to invest. The questions in bold
are what she personally cares most about. The other questions are
common examples of what many early-stage software investors may
ask.

Team
● Tell me a bit about your background and your co-founder(s)’s
background.
● How do you all know each other?
○ How long have you worked together and in what
capacity?
● Why is your team uniquely motivated to solve this problem?
● Why did you pick your co-founder?
● Who do you need to hire during the next 18 months to be
successful?
● When was the last time you disagreed on a business issue?
How did you resolve it?

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● Do the founders have the knowledge to build the technology

or would they need outside help?
● What does the cap table look like? (equity distribution across
founders)

Problem You’re Solving

● What is the speci c problem you are solving?
● How big / serious of a problem is it?
● Why is this a problem?
● Who has this problem?

Solution / Product
● How are people solving this problem today?
● Describe your solution to this problem.
● What effort/timing is required to switch from a different
solution to yours?
● (For deep tech) What is unique about the tech? (Do you have
any patents / IP / trademarks?)
● What is your product roadmap for the next 6-12 months?

Market / Market timing

● Why now?
○ Why hasn’t this worked/been done before?

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● How big is this speci c market?

○ How many people does it affect?
○ How much money are people spending to solve this?
● What is your unfair advantage?
● Who would you see as your key competitor at the moment?
Why?

Customer Acquisition / Unit Economics / Go-

To-Market
● Who is your customer persona?
○ Who is the end user?
○ Who is the buyer?
○ What does a day-in-a-life look like for these people?
● How much are people paying today? (range?)
○ How much do you think you can charge in the future?
● How are you currently getting users/customers? (what
customer acquisition channel(s)?)
● How do you think you will get users/customers in the future?
● How much does it cost you currently to get a user? And in
which channel?
● How have different customer acquisition channels performed?
For example, what is the difference in conversion rate between
Facebook ads versus LinkedIn ads?
○ Tip: understanding how to slice and dice your numbers
over time and through different channels helps you
understand two things: Are your numbers getting better

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over time? And which channels are working or not

working?
● How much does your solution/product cost (COGs)?
● How much will it cost in the future?
● Why do people buy/use your solution?
● What is the sales cycle to-date?
● How does the product team interact with current and
potential customers? If so, how and how often?

Competition
● What differentiates your solution from other alternatives?
● Who are you more afraid of: Google or another startup?
● Who are you most afraid of?
● What happens if Google (or equivalent) does this?
● Who are the major players?
● What is your moat?

Traction
● When did you start the company?
● How many customers do you have to-date?
○ Or how many pilots / contracts are signed?
■ When are the start dates of those pilots / contracts?
■ What are the contingencies?
○ Or how many LOIs signed? What do those look like?
● How much revenue have you generated to date?

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○ How much revenue did you earn this month? Last month?
The month before?
○ As product revenue vs consulting / services revenue?
○ What are your margins?
■ Tip: margins are especially relevant for companies
with a high cost of goods, like expensive items, or e-
commerce companies with delivery expenses.
● Any notable customers?
○ Any enterprise customers paying big money?
● What does retention or churn look like? (if you know)
○ How many daily active users do you have? How many
monthly?
○ What is your monthly churn?
■ Tip: churn is especially important for subscription-
based companies
● What does engagement look like?
● What is your website conversion rate?
○ How have your conversion rates changed over time? Have
they increased, decreased, or stayed the same?
● Any upsells?
● When will your company break even in terms of pro tability
and cash ow?

Fundraising/plans
● How much have you raised to date?
○ What were the terms in your last round?

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○ Who are your current investors?

● How much are you looking to raise?
○ What are you looking to achieve (milestones) with this
round if everything goes well?
○ What milestones do you expect to hit with this raise?
● Where are you in your round?
○ Have the current terms been set? And if so, what are
they?
● What is your burn rate?
● What is your top priority for the next 3-6 months?
● What metrics do you care about when measuring the health of
your business? Why?
● What are your capital costs? (if capital intensive, like hardware /
e-commerce)
○ Minimum batch sizes / inventory / etc?
● Have you secured a lead investor for the round? If so, who and
how much is the lead investing?

We recognize that these are tough questions. And sometimes tough

questions put people on the defensive. A red ag for most investors
is when founders get SUPER defensive, or even dismissive of the
questions or ideas that investors bring to the table. This is because a
defensive founder indicates that they are probably not coachable.

Now you should feel free to push back against an investor if you
have a different opinion. Especially if you have data to back up that

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opinion. But there's a difference between being a jerk and holding

your ground.

Our team at Hustle Fund looks for founders with growth mindsets.
People who are open to receiving new information and hearing new
perspectives, then changing their worldview based on that new
information. It's a big red ag when it appears the founder lacks that
mindset.

If you nd that investors are grilling you on your

business, that’s actually a good sign. This means
the investor is interested in the business and
wants to dig in more.

One more thing: your numbers or answers might not be impressive,

especially if you’re an early-stage company. That’s OK. The important
thing is to know your metrics.

True story: once someone from our team was on a Zoom meeting
with a founder looking for investment. During the call, one thing
became painfully clear: this founder didn’t have a basic
understanding of his metrics.

He didn't know how much traf c he got each month, or at what rate
his customers converted. He didn't know how many of his purchases

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were from returning customers, or what it cost to convert a visitor

into a paying customer.

Spoiler alert: we didn't invest in this founder.

But the reason we didn't invest had nothing to do with what his
actual numbers were. It came down to the fact that this founder
didn't understand what was happening in his business. If the
founder had a rm grip on his metrics – even if the numbers were
low – it would have shown us two important things:

1. He has thought critically about his funnel

2. He knows what's happening in the business and can iterate
quickly.

I'll say it again: the actual numbers meant far less to us than the
founder's understanding of those numbers. Because without that
knowledge, how can the founder know where to focus his time and
resources? How will he know what's driving the business, and what
changes should be made to improve it?

Prepare as much as you can to answer these questions. Respond

gracefully and honestly. You’ll be on the right path.

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Questions that founders should

ask VCs
Fundraising meetings are a two-way street. Entrepreneurs need to
do a good job answering an investor’s questions, but they should
also ask questions to VCs. Skipping this is a serious mistake.

Entrepreneurs should learn everything they can about an investor

before entering into an agreement. You don’t want to take money
from bad apples. If things get tough down the road, investors can:

● Call their convertible note

● Potentially replace you (depending on the equity and board
situation)
● Threaten litigation (even if they have no case)
● And most importantly, be a big pain in the ass and call you all
the time

You are looking for a relationship – not just money.

Before taking an investor meeting (or even reaching out), do your

homework and research investors. Make sure to reach out to
investors who are actually a good t for your business (stage, sector,
amount, what they look for, etc). Most websites will spell this all out –
especially newer micro funds who are trying to differentiate
themselves in the market by going after a speci c niche.

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In addition, here’s a list of questions you should ask investors when

you meet them:

● How big is your fund? (for VCs)

● Where are you in your fund? (for VCs)
● When will you need to fundraise again? (for VCs)
● Do you lead rounds? (for VCs)
● What is your typical check size?
● Do you reserve capital for follow-on?

This gives you a sense of how much money you can raise from a
given rm or individual. This is key because there are a lot of
investors out there who have no money but are still taking meetings.

It’s OK to take a meeting with an investor who has no money to

invest, but you should know that they won’t be able to come into
your round until they have raised money so your meeting might not
lead to anything.

Understanding how much is allocated for follow-on investments also

gives you a sense of how much money is left in a fund. If a fund is
$10M and two-thirds is reserved for follow-on, then in practice,
there’s $3M for rst checks. If the rm has already deployed $2M,
you know that your chances of getting a rst check are slim.

In general, it’s slightly easier to raise from funds that have just raised
a fund. They have a lot of money that needs to be deployed, and so
they are more eager to invest. In contrast, when there are fewer

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dollars left to deploy, those last dollars will be extremely

competitive.

You should nd out an investor’s cadence:

● How many seed deals have you done in the last 6 months?
● How many seed deals do you anticipate doing in the next 6
months?
● How long does your process typically take?

And how decisions are made:

● What is involved in your process?

● Who is the decision maker? (for VCs, although sometimes
angels need to consult their families or friends)

By the end of the meeting, you should understand:

● Everything about an investor’s decision-making process

● Whether you have a champion to take this to the decision
makers (whether it be partners at a rm or their family)
● What the concerns are with your business in their eyes
● What the CONCRETE next steps are

If you do not have answers to ALL of these questions, do not be

afraid to keep asking questions.

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Follow up immediately after the

call
After Eric pitches a prospective investor, he sends a follow-up note
as quickly as possible. Sometimes within minutes of hanging up. You
don’t have to be that fast.

But it’s good to set expectations before you hang up, saying
something like “I’ll follow up in the afternoon” or “I’ll get back to you
within 24 hours.” And then actually follow up within the timeline
you’ve set.

This signals that you’re a person who does what they say. This may
seem like a small thing but investors notice these details.

Craft the perfect follow-up email

Let’s talk about the anatomy of a great follow-up email, then we’ll
show you an example template that you can use in your follow-up
emails.

First, we recommend reiterating details that made the other person

excited during the call. Here’s an example.

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Imagine you just pitched your ntech company to an investor, who

mentioned that she’s interested in Latin American ntech
infrastructure. You can reference that note and frame your company
(or yourself) as a thought leader in this space in your follow-up
email.

Next, include anything you promised to share after the meeting. This
could include your pitch deck, a link to an article you mentioned,
info about your market, data from your pilot program, etc. Make sure
the other person has everything they need to properly evaluate your
startup.

Lastly, set expectations on what’s next. This could be something like

“I’ll follow up in a week after you’ve had a chance to process the info
and organize your thoughts.” Most email clients allow you to
“snooze” the email, so the message will automatically pop back into
your inbox a week later (if you haven’t received a response by then).

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Example of a good follow-up email:

Hey {NAME},

Thanks so much for spending some time with me this morning!

Really glad we can share intros and get to know one another. I
love how excited you were about {Reference back to something
that made the investor excited during the call}

Some additional context about {Your company}:

● {Mention notable progress}

● {Include link to pitch deck and other materials}
● {Link to notable press coverage}

Thanks for your time and hope we get a chance to collaborate!

Best,
Eric

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